Kingfisher Airlines denies shutdown rumours (Lead)

March 4th, 2012 - 7:59 pm ICT by IANS  

New Delhi/Mumbai, March 4 (IANS) Cash-strapped Kingfisher Airlines Sunday refuted speculation that it planned to shut down its operations as a section of pilots have threatened to boycott work without pay and dues being given to them.

The development comes after Kingfisher’s chief executive Sanjay Aggarwal met pilots Thursday and sought their cooperation. However other reports also said that Aggarwal told pilots that if they do not cooperate, then the airline would have to shut shop.

Seeking to refute the allegations, an airline spokesperson said: “Aggarwal met with a group of pilots to appeal to them not to stay away from flying duties which would potentially affect the operating schedule.”

“At no time was there any suggestion that Kingfisher Airlines would shut down. Our flights are operating as per schedule.”

Civil Aviation Minister Ajit Singh Friday said the airline’s licence could be temporarily suspended as its inability to pay its staff could affect safety and the regulator, Directorate General of Civil Aviation (DGCA), sees an operational risk in it.

The minister added that the airline can restart operations once these issues are resolved.

The airline is also seeking a credit extension from Airports Authority of India (AAI), having a substantial amount of dues towards AAI.

Meanwhile, the airlines’ problems woes increased as service tax department — for the fourth time in last four months — froze 40 bank accounts belonging to Kingfisher which owes Rs. 40 crore to the department as the airline failed to meet the Feb 29 deadline for clearing the dues.

The airline official said: “We are trying our very best to co-operate with the tax authorities and get our accounts un-frozen at the earliest so that normalcy could be restored, employee salaries paid and further aircraft recoveries started.

The airlines’ latest trouble started Feb 18 when its employees in Kolkata went on a flash strike. The carrier, on the other hand, blames the seizure of its bank accounts by the Income Tax department as the main reason for flight plan curtailment.

The DGCA is also said to be screening the airlines’ operational aircraft to find their airworthiness and if financial constraints have in any way compromised passenger safety.

According to sources, the airline has violated Rule 140 of the Aircraft Rules by not seeking prior approval of the regulator before curtailing its schedule for the second time since last year.

Currently, the airline is operating about 170 daily flights — down from its original schedule of 240 operations

Kingfisher has a debt of Rs.7,057.08 crore. The company’s net loss widened to Rs.444.26 crore for the quarter ended Dec 31, 2011, from Rs.253.69 crore in the October-December quarter in the last fiscal.

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